Here's Proof That States Are The New Banks


The matter of state bankruptcies and state bailouts now plays a role in politics extremely similar to banks a year ago.

It’s popular to be anti-state government now, especially if you’re a Republican (the GOP wouldn’t put it this crudely ever, but we don’t have to be artful here).

Now here’s the strongest evidence yet that states are the new banks.

A story in the New York Times (which just popped up on The Drudge Report, naturally) talks about — gasp! — bonuses being paid out by the city government in San Francisco.

It does sound weird, the bonuses are being paid out to retirees, and it relates to excess earnings on investments in 2010, despite ongoing solvency risks.

Still, just the fact that bonus outrage has become part of the story confirms that banks are to 2009-2010 what states are to 2010-2011.

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